David Darst is chief investment strategist for Morgan Stanley’s Global Wealth Management Group. He rightly predicted the S&P 500 would hit 1400 this year -- and he sees more to come for 20007 with the key index hitting 1525, thanks to stable inflation and interest rate environments.

“We’re looking for kind of a soft [economic] landing” in 2007, said Darst. He says real growth for this year will be 3.3%, and that Morgan Stanley analysts augur a minor slowdown to 2.9% for 2007. Inflation, too, should be a less bitter pill than many had feared: he foresees “high two, low three” percentage price rises.

In another big-picture view, he says, “We think the seven-year [market] out-performance is about to reverse – the seven-year itch is about to be scratched,” suggesting that the market won't perform as well in 2007.